LOS ANGELES — (BUSINESS WIRE) — February 5, 2019 — AECOM (NYSE: ACM), a premier, fully integrated global infrastructure firm, today reported first quarter revenue of $5.0 billion. Net income and diluted earnings per share were $52 million and $0.32 in the first quarter, respectively, and represented decreases of 54% year-over-year. On an adjusted basis, diluted earnings per share¹ was $0.56.

First Quarter 2019 Accomplishments:

• Organic³ revenue increased by 5% over the prior-year quarter, highlighted by double-digit growth in the Company’s higher-margin Americas design business and Management Services segment.
• Total backlog increased by 22%² year-over-year to a new all-time high of $59.5 billion.
• Wins in the quarter were $11.0 billion, which included the contract for the $7 billion Terminal One project at JFK airport in New York, a 1.3 book-to-burn ratio⁴ in the Management Services segment.
• Solid execution across the Company’s portfolio of projects resulted in adjusted earnings that were ahead of expectations, including 16% year-over-year adjusted EBITDA growth.
• The Company continued to execute on its capital allocation priorities, including additional share repurchases in the quarter and in January, bringing total share repurchases to $210 million under its $1 billion Board authorized repurchase plan.

Update on Strategic Value Creation Actions:

• AECOM has completed nearly all of the actions necessary to achieve its expected $225 million of annual G&A savings, which are expected to generate $85 million of realized savings in fiscal 2019, resulting in at least 110 basis points of margin improvement in the DCS segment this year and additional expected benefits in fiscal 2020 and beyond.
• The Company continues to make progress on de-risking its business; in addition to the decisions made in fiscal 2018, including the planned exit from the fixed-price combined-cycle gas power plant construction market and non-core Oil & Gas markets, it is no longer pursuing international at-risk construction opportunities, has completed the spin-out of the infrastructure financing arm of AECOM Capital, and is reviewing its remaining at-risk construction exposure.
• The Company has completed approximately 25% of its plan to exit at least 30 countries as part of a strategy to simplify its operating structure and to hone management’s focus on the most profitable growth opportunities.
• Collectively, these actions position the Company to capitalize on its record backlog by focusing resources on higher-margin and lower-risk professional services businesses where its competitive advantages are greatest.

“Continued overall growth in the DCS and MS segments, new records for wins and backlog, and adjusted earnings that surpassed our expectations resulted in a strong start to the year, and we are firmly on track to achieve our full-year guidance, including expectations for double-digit adjusted EBITDA growth,” said Michael S. Burke, AECOM’s chairman and chief executive officer. “Importantly, we have taken and will continue to take decisive actions to maximize the profitability of our record backlog. With the positive momentum in the business, including several substantial wins already in the second quarter, and the expected benefits from our strategic actions, we are committed to achieving our five-year financial targets from fiscal 2018 through fiscal 2022, including a 5% revenue CAGR, a 9% adjusted EBITDA CAGR, a 12%-15% adjusted EPS CAGR and at least $3.5 billion of cumulative free cash flow.”

“The several records in the quarter create a strong foundation for expected profitable growth,” said W. Troy Rudd, AECOM’s chief financial officer. “Though cash flow was below our expectations primarily due to the partial U.S. government shutdown, we expect to recover this cash flow as the year progresses and expect to achieve our full year free cash flow guidance of $600 to $800 million. Importantly, we continue to execute on our capital allocation policy, as evidenced by $210 million of repurchases to-date under our $1 billion Board authorization.”

Wins and Backlog

Wins were $11.0 billion, which set a new record for the Company, and resulted in a book-to-burn ratio⁴ of 2.0. Wins included strength across the business, highlighted by the award for the new $7 billion Terminal One at JFK, and a 1.3 book-to-burn ratio in the MS segment. Total backlog increased by 22%² over the prior year to $59.5 billion, which also set a new record.

Business Segments

Design & Consulting Services (DCS)

The DCS segment delivers planning, consulting, architectural and engineering design services to commercial and government clients worldwide in markets such as transportation, facilities, environmental, energy, water and government.

Revenue in the first quarter was $2.0 billion and increased by 5%. Constant-currency organic³ revenue increased by 7%. This performance included 12% organic growth in the Americas, which was driven by the transportation and water markets, including a positive contribution from the storm recovery efforts in the Southeastern U.S. and Caribbean.

Operating income was $120 million compared to $85 million in the year-ago period. On an adjusted basis, operating income¹ was $126 million compared to $92 million in the year-ago period. Operating income increased over the prior year period due to strong performance in the Americas and Asia-Pacific regions.